'Flags of convenience' harming Cambodia's image

The Phnom Penh Post
http://www.phnompenhpost.com/

Written by Kay Kimsong
Thursday, 07 May 2009

MORE and more foreign ships are registering in Cambodia for a fee to avoid taxes in their own countries, but opposition lawmakers say flag of convenience licensing policies damage the Kingdom's reputation, saying that ship owners are smuggling drugs or weapons under the Cambodian flag.

"Registering these ships does not only damage Cambodia's reputation, but it is dangerous if some of those ship operators use Cambodia's flag to commit international crimes," said Sam Rainsy Party member Son Chhay.

There are currently about 1,000 ships registered in Cambodia, according to Seng Lum Nov, secretary of state for the Council of Ministers, and global activity of Cambodian-registered appears to be rising.

In 1999, there were 190 port calls to Japan's island of Hokkaido by vessels registered in Cambodia, which climbed tenfold to 1,900 port calls last year, Kyodo news reported.

During the same time period, Russian port calls to the island declined from 9,200 to 1,400, even though Russia continues to import much of its marine produce from the port. Kyodo reported.

Lax regulations
Ships are obligated to adhere to the laws of countries in which they are registered. That means that changing the registry to Cambodia, where the laws are relatively lax, could lower safety requirements and wages.

Japanese media has reported that "aged secondhand ships" are being used.

But Seng Lum Nov says the private company running the flag of convenience licensing in Cambodia has "good experience and working skills in the registration process".

"Our role is to act like a vehicle checker," he said.

"We have to make sure that a vehicle or ship is safe and secure. It has to have a pilot and comply with full equipment services... It needs to have radio contact and all of the required ship equipment."

He said that the ships registered in Cambodia were not necessarily Cambodian, but that the Kingdom still has the power to take away their local licences.

He added that the government has revoked licences midway through their registration agreements.

"If they commit a serious infraction, we have the right to withdraw their licence... It is like having a driving licence. If you break the traffic law, you will be arrested," Seng Lum Nov said.

Seng Lum Nov also claimed that Cambodia's flag registration fee was lower than in many developed nations, but it was by no means the world's cheapest, describing the fee as "between cheap and high".

He refused to disclose how much the government has collected in fees, the amount that authorities charge, or the name of the private company that has been contracted to run the flag registration.

He only said that the company charges a fee based on the size and weight of the ship and then shares that money with the government.

Ship registration had previously been handled by the South Korean-based International Ship Registry of Cambodia (ISROC), which re-launched flag-of-convenience operations in 2003 after it had been suspended amid concerns that the registration process was mismanaged and that Cambodian-flagged ships were being used illegally.

Son Chhay, an opposition lawmaker and former head of the committee in charge of transport and communication, said that Russian, Chinese and South Korean ships are using Cambodian flags because they are cheaper and that ships that violate the law are harming Cambodia's international reputation.

"To get a flag from us, it is cheap. If they face problems, it won't damage the reputation of their countries. We need to take more measures to screen these ships and review the policy on flag registration," he told the Post.

"If there is a shipping accident such as an oil spill or a collision at sea, they will hold Cambodia responsible," said Son Chhay.